As more companies call employees back to the office, the Manhattan leasing market is looking more like its old self.
Office leasing volume was up almost 50 percent in October from a year ago, driven by Bloomberg’s 925,000-square-foot extension and expansion at 919 Third Avenue and a few other large deals, according to a Colliers report.
Manhattan’s availability rate fell from 17.3 to 16.8 percent, the lowest in two years. Sublet supply also tightened, dropping to its lowest level since January 2022.
TPG’s new 301,000-square-foot lease at the Spiral in Midtown South and Blue Owl Capital’s 239,000-square-foot extension and expansion at Aby Rosen’s Seagram Building in Midtown were the two next-largest leases.
Midtown accounted for nearly 60 percent of the month’s leasing activity, even though the market represents only about 45 percent of Manhattan’s inventory. If leasing continues at the current pace, Midtown’s year would be its strongest since 2018.
“The narrative has really shifted in Midtown’s favor over the last couple of years,” said Colliers’ Franklin Wallach, the author of the report. “Pre-2020, there was this big question mark hanging over Midtown, especially with the competing rise of Hudson Yards, Manhattan West and Lower Manhattan. And it’s really been fascinating to see sort of this Midtown 2.0.”
But overall leasing volume remains well below 2019 levels, when the Manhattan market notched 43 million square feet of leasing activity. About 27 million square feet have been leased so far this year.
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“It would take an extraordinary amount of leasing activity in the fourth quarter for full-year
Manhattan leasing activity to match or exceed 2019,” Wallach said.